Gloria Salinas, Managing Director, Economic Development
While most corporate relocation decisions have been delayed due to the pandemic, McKinney Economic Development Corporation’s Innovation Fund is landing tech startups at warp speed.
Over the past eight months, the Innovation Fund — an incentive-based fund for tech startups in specific industries — has generated 11 new tech headquarters and startup relocations and expansions for a total of 230 new jobs, with an average salary of $86,000. In the healthy, pre-pandemic business climate, an economic developer averages one sizeable corporate or industrial relocation project every three years, said Danny Chavez, Senior Vice President at McKinney EDC.
“Our specific and targeted eligibility requirements of the program allow us to be straight forward and complete deals quickly and to match the speed a startup needs,” Chavez said. “We’re building an ecosystem and creating a space for startups to access funding, and helping them scale at the timeliest need for their company during the startup lifecycle.”
Since launching in January, the Innovation Fund has received 40 applications from around the United States – more specifically, New York and California – as well as across the Dallas Region. Recent tech headquarters announcements include CourMed Headquarters, a Software as a Service (SaaS) company in healthtech; EnginSoft USA Headquarters, a Computer Aided Engineering (CAE) company; and Invene Headquarters, a Product as a Service (PaaS) company in healthtech.
The fund and its accompanying Innovation Corridor, hyper-focused along State Highway 121 and Downtown McKinney, are the future growth corridors for economic development in McKinney.
“The future of the economic development industry needs to be more streamlined and work on a shorter [deal] timeline,” Chavez said. “We have capability to move your average economic development deal from a six-month to a one-year timeline, down to a decision in 4-to-8 weeks. And that is where the industry needs to move.”
With no real marketing, Chavez and his team invested in the fund’s online platform to host a simple online application focused on attracting specific high-growth startups in healthtech, fintech, cybersecurity, artificial intelligence, SaaS, and gaming, electronic, and digital arts industries.
The fund can predict and analyze McKinney EDC’s effect on attracting and creating the next generation of jobs, and characterize the fund’s performance on meeting targeted measures. The program aggregates real-time data for real estate demand. Chavez and his team provide developers and landlords with organic, direct-from-the-company real estate demand to help inform investment decisions on office type, size of the average use, and product type that is critical in maximizing investment.
“Success of the Innovation Fund is being able to build a vibrant tech innovation cluster along our Innovation Corridor,” Chavez said. “We have a lot of corporations down the street in Frisco and Plano, and we’ve got the tech companies to complement them. We stopped trying to compete shoulder-to-shoulder with our sister cities, and rather support them and find our niche.”
Forging a Future in Tech
It can be hard for a city to stand out in the Dallas Region, the nation’s fourth-largest metro area, which boasts about 200 cities and townships across North Texas.
But Chavez and his team are capitalizing on the belief that the Dallas Region is becoming the next concentrated high-tech hub in Texas, and they are focused on carving out a space in the market to build a vibrant cluster for innovative tech industries.
“The broader strategy is to create infrastructure in a major metro area and be a standout,” Chavez said. “We are more focused on human aspects that are important to a development and not just transferring a company to a city.”
If all the 40 Innovation Fund applications were approved, Chavez said they would create more than 600 software and technology jobs, and amass a real estate demand of more than 122,000 square feet of office space in McKinney.
“When you see the job figures and average salaries we’re working with, considering the short amount of time the fund has been in existence, we see enormous potential in bolstering our tech ecosystem,” Chavez said.
The EDC is currently receiving about five applications every month and averaging a new tech company announcement every few weeks.
“I believe DFW is becoming the next tech hub in Texas. With that in mind, we have focused our efforts on developing a capability to help spur innovation in economic development and working with startups,” Chavez said.
By the Numbers: McKinney Innovation Fund
- 11 Tech Startup Relocations and Expansions
- 230 Total New and Existing Jobs Created
- 461 New Jobs to Be Created
- 638 Total Qualified New and Existing Jobs
- $86,000 Average Annual Salary